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By Sean Pendergast
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By Richard Connelly
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By Craig Hlavaty
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When battles over light rail expansion reached their angry peak last fall, nearly every politician in town was jockeying for the TV cameras. Then-mayor Lee Brown got on a bus to push for the plan, while Congressman John Culberson produced a chart lambasting it. Former mayor Fred Hofheinz then denounced Culberson's group from the courthouse steps.
Only District Attorney Chuck Rosenthal, it seemed, was trying to stay out of the fray. At the time, it appeared forgivable, even admirable. Texans for True Mobility, the antirail group chaired by Culberson, had refused to disclose its contributors or financial records. Rosenthal was asked in October to investigate the group for alleged criminal violations of state elections law.
The D.A. said there would be an investigation, but he wouldn't reveal the results until after the November 4 election. After all, that was only a few weeks away, and the last thing Rosenthal wanted was to influence voters.
Since Rosenthal's announcement, however, nearly three months have passed. There's been no word from the D.A. and no accounting by Texans for True Mobility of the $1.4 million it claimed to raise: neither how it was spent nor who donated it.
But the group did file a report naming two donors who contributed $175,000 to what it calls its political action committee. Its Web site also includes a list of supporters.
And many of those names show up on an entirely different list: that of Rosenthal's contributors. The D.A.'s campaign records show that, since 2000, Rosenthal has received nearly $30,000 in donations from known TTM supporters. He's collected from eight of the 19 citizens listed on TTM's site. He also took $15,000 from developer Michael Stevens, one of the group's most outspoken leaders.
Those links -- as well as the D.A.'s hands-off stance during the crucial days before the election and his silence on the current probe -- have heightened concerns among TTM's critics.
"The public needs to be assured that a full and proper investigation will take place," says Fred Lewis, president of Campaigns for People, a nonpartisan group based in Austin. The contributions are so significant, Lewis says, that Rosenthal should recuse himself.
"People have a right to have someone do this investigation who does not have a relationship, or a vested interest, in the parties being investigated," he says.
Rosenthal says there's no need for him to step aside. "People have given me campaign contributions and been indicted, a number of times," he says. "They give me money for good government. And I supply them with good government."
Ed Wulfe, who chaired the Citizens for Public Transportation, the group advocating light rail, also shrugs off the connections. "I don't think the mere fact that they're supporters of Rosenthal means anything. They're the same ones who are Tom DeLay supporters, John Culberson supporters."
But Rosenthal has drawn criticism for the same issue before. When problems with the Houston Police Department's DNA lab surfaced, all 22 state district criminal court judges urged the D.A. to recuse himself and appoint an outside investigator. He refused, and his six-month investigation ended without a single indictment.
And when it was disclosed last year that he'd accepted a $2,500 contribution from a construction company owner under indictment, he returned the money -- but it took him two weeks to decide to do it.
In the month before voters narrowly approved the $640 million bond measure, both sides swapped accusations of improper campaign tactics. Some were no more than thinly veiled political ploys.
But there seemed to be sufficient reason to investigate the complaints about Texans for True Mobility. The group registered with the IRS as a nonprofit "educational forum," which meant its financial records could be closed to the public. But TTM was still running incendiary TV ads, clearly intended to defeat the rail issue. Each ad actually carried a disclaimer at the bottom, stating it was a "paid political advertisement."
Contributions to fund an "educational" ad might be exempt from disclosure laws. But funding for a "paid political advertisement"? Not likely, says Suzy Woodford, executive director of Common Cause Texas. "Either they were breaking the law, or they were finding a loophole and just driving a great big Mack truck through it," she says.
Ethics investigations can take months; lawsuits typically take even longer. A timely probe by Rosenthal's office was the only realistic way that the group's backers would be revealed before the election. However, as Rosenthal wrote to the Chronicle, he has a "long-standing policy" not to meddle in elections.
Media coverage indicated that the D.A.'s investigation would be prompt, but the results would not be announced until after the voting. But last week, when the Press inquired about the investigation's status, Rosenthal said he didn't know. Only then did he say he would ask his government affairs chief for a report. He now says he expects to receive it soon.
While Rosenthal has waited, experts believe a landmark ruling from the U.S. Supreme Court has added credence to the complaint.
Advocacy groups have argued for years that as long their ads don't contain "magic words" -- a direct plea to vote for or against something -- they are educational, not political. In that case, the argument goes, the identities of those who fund the ads can be kept secret.
But that theory was shattered when the court upheld the McCain-Feingold campaign finance reforms last month, says Lewis, the attorney who heads Campaigns for People. "The law has been clarified to make it very clear that hiding behind 'magic words' won't cut it anymore."
Karen Lundquist, executive director of the Texas Ethics Commission, agrees. She declined comment on the complaint against TTM. However, if a group spends money "in connection with an election," she says, it typically has to file finance reports. "They may claim it's not about the election, but to let people know about the issues. With the Supreme Court case, some of those arguments have lost their punch."
To Lewis, it only makes sense. "Why would anybody run TV ads four weeks before an election, mention the issues and target voters if they're not interested in influencing elections?" he says. "It's electioneering, and everybody knows it."
In late October, the antirail group reported the sources for a fraction of its purse: the $175,000 earmarked for its "political action committee." Such committees, unlike educational forums, must reveal contributions.
The PAC money came from just two donors. One is suburban developer Stevens, who contributed $155,000. (He also has donated $15,200 to Rosenthal campaigns.) The other is restaurateur Edd Hendee, who contributed $20,000. (He's given $1,250 to Rosenthal.)
Even as they criticize rail supporters for their financial interests in the expansion, antirail advocates argue that they need anonymity to protect them from prorail leaders and government officials.
Hendee admits he hasn't taken any heat. "But I don't do business with the city," he says. "I don't run permits through City Hall, I don't do business with the Greater Houston Partnership. I can certainly understand someone else's reluctance."
But he seems none too worried about his fellow rail opponents being outed. He scoffs at the ethics commission complaint as mere "political posturing from those who oppose our positions."
He also offers an explanation for why Rosenthal's investigation hasn't wrapped up yet: There's never been an investigation.
As the committee's treasurer, he's custodian of the financial records at the core of the dispute. But he says no one from Rosenthal's office has even contacted him -- hardly the mark of a sizzling investigation. (Rosenthal says he doesn't know the details of the investigation, but he doesn't dispute Hendee. The D.A. explains that the probe may center on legal questions -- "I suspect it's a matter of law," he says -- and not what's in the group's records.)
Don Smith, the D.A.'s governmental affairs bureau chief, says, "There is an investigation going on, and we're going to try to resolve it." Smith concedes that the Supreme Court ruling may have complicated things, but says the investigation is on track.
"There are other people involved other than Edd Hendee," Smith says. "Before anything is resolved, I'm sure we'll talk to him or his legal representative."
Even if Rosenthal is taking the complaint seriously, it may be academic at this point. As Wulfe notes, regardless of what the D.A. does now, it's too late to matter at the polls. "I think the public is entitled to know, up front, who's supporting what," he says.
In the battle over rail, that moment has passed.
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